I placed this into the coin chat forum, since I think the conversation applies to all coins/countries; it's just that Canada did it first. I just noticed (which means it's probably been out for at least seven months) that the RCM is selling a half ounce silver coin for $50 CDN. Sure, the coin has a $50 face, but the reality is that few of these will ever be redeemed. Essentially, Canada has figured out a way to remove 50 units of their currency from circulation for about 10 units in cost. That's, what, 400% seigniorage? Very good job, Canada! That's how you hold back inflation. Now, for those who think I'm an idiot for thinking this way, here's my rationale: Canada pays, let's say $8 per coin for the silver and another $2 for the processing/minting of the coins. For their 180,000 production run (two coins @ 90k each), they remove $9mm out of circulation at a cost of $1.8mm. The only scenario under which the coins get redeemed would be a prolonged recession, which has the extended benefit of adding $9mm (potentially) back into the economy during a time of slow money. This is brilliant! The US should follow suit and release a $1,000 "quad-metal" (85% platinum, 10k white gold, 35% silver, 75% nickel) "Thousand for thousand" coin. Obviously, most of the metal would need to be cheap, so the thickest part would be the outer ring of nickel, then a ring of the same silver that was used for the core of the 40% coins from 1965-1974, then some 10k gold, finishing with an inner circle of low-grade platinum. The total cost should be ~$85, give or take. Let's say a production run of 15,000 of "coins" released, twice a year in a ten-year series. That would remove $300mm of currency from circulation. If they raised the numbers to 25,000 each month, that would jump the number to $3B. $3B for $250mm.
If I recall correctly, the coins that the RCM is producing in this series cannot be used as traditional coinage can for transactions and banks may refuse them.
When France launched such a program back in 2008, people could buy €5 and €15 silver pieces, and €100 gold pieces, at face. In the years to follow, the program was continued with different denominations. And yes, of course the value of the silver or gold content at the time of issue was less than the face value. If you want bullion pieces or bars, buy bullion pieces or bars. Others buy silver/gold coins with face values that are just a fraction of the issue price. These pieces however are a nice "in between" product in my opinion. Christian
